Hyderabad: National Aviation Co. of India Ltd, or Nacil, the government-owned company that runs Air India, is setting up an airframe repair hub for Airbus planes with European Aeronautic Defence & Space Co., or Eads, the parent of plane maker Airbus SAS, in Delhi, according to a company official.
The initial investment for the so-called maintenance, repair and overhaul, or MRO, facility for Airbus planes would be around $80 million (about Rs387 crore).
An agreement will be signed in Delhi on Thursday, said the official, who did not want to be named.
Air India has an existing repair hub for planes in New Delhi and would offer the facility and equipment as its equity, the same person said, adding that details were being worked out for the venture.
Raghu Menon, chairman of Nacil, confirmed the development, but wouldn’t elaborate.
Nacil also has a similar deal with the Boeing Co. for a repair hub in Nagpur.
Other airlines in India operate at least 120 Airbus and 150 Boeing aircraft on domestic and international routes. Most of these planes are taken to Singapore or Dubai for major maintenance. So, a local hub could potentially lower costs.
India benefits from lower manpower costs, about $15 an hour, some 20% less than prevailing rates in the Asia-Pacific region and nearly 50% less than in the US, according to consultant Ernst and Young.